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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and transferred in digital kind. Sounds basic enough, but how does it all work?
This kind of currency is believed to be great to utilize for making purchases on the internet due to the fact that if it works the way it was suggested to, deals must be rather confidential and untraceable back to the payer or user.
This implies that hackers would no longer be able to collect individual information from individuals who utilize their credit cards to make online purchases. This would obviously reduce the number of taken identities that happen every day.
To assist you understand more of, “what is digital currency?” I have done a fair bit of research on the subject and have actually found that there are a number of various types out there, each with it’s own distinct qualities.
Here are just a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold offers an additional measure of security and if you hold this kind of currency, you might potentially straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies permit you to send out money all over the world as long as you have cash in the account. For some services offered by these kinds of companies, you get charged a fee on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Called Hard Electronic Currency, it is meant to be more like utilizing cash to make your transaction however your deal is non-refundable when made. This type of system only works in one direction.
The E-cash concept has actually developed in addition to the development of the Web. Individuals just do not feel comfortable with offering their individual credit card information over the Internet when making a purchase.
Too many bad things can happen like identity theft. No one desires their identity stolen.
Lots of companies have actually attempted to create this type of payment or monetary system to minimize the threats of shopping online.
Numerous countries have actually successfully produced systems for “in-house” use such as Hong Kong’s Octopus card. This card works similar to a sort of debit card where the user loads cash onto the card and then all the money is deposited into a bank. They can then utilize the card for anything they need to utilize it for.
Some countries are working on or have systems that allow the user to move money through mobile devices. I believe this is somewhat like what Chase lets their consumers do. Their consumers can take an image of their check, front and back, with their phone and make their deposit electronically.
I do hope that this gives you some concept of what is digital currency and how it is attempting to take it’s location on the planet of e-commerce. There might be a bit more to it than I might explain in simply one little post but I think you can get a great concept.